Between 2018 and 2023, the amount of wealth controlled by women grew by an impressive 51%. Yet when it comes to investing, women often play a different game. A recent McKinsey study found that in 2023, 45% of European women were considered risk-averse, compared to just 38% of men. While this has sparked concern about the gender investment gap, the full picture is far more nuanced.
When women do invest, those investments outperformed their male counterparts by 1.8%. This creates a compelling story - one that’s strategic, values-led, and consistently effective. So rather than asking why women invest differently, we should be asking what we can learn.
The life context behind women’s investing goals
Women and men typically follow different structured realities and circumstances. This has a direct impact on how and why they invest their money. On average, women in the UK live nearly four years longer than men, so their retirement savings need to stretch further. Yet they typically earn less. In 2024, the gender pay gap stood firmly at 13.1% for both part-time and full-time employees, while there’s a 38% gap between male and female pension pots.
Many women also take career breaks or work part-time to provide care. This can result in:
lower or no pension contributions while they’re not earning;
gaps in National Insurance contributions (NICs) that can affect State Pension eligibility; and
missing out on any employer contributions to their workplace pensions.
These factors create a sharper focus on long-term financial stability over short-term gains. Rather than chasing high-risk returns, women are more likely to invest with security and future-proofing in mind. This aligns their financial goals with the realities of longer lives, career breaks and less predictable income over time. Risk aware is what women are, because throughout their lives, they’re exposed to more of it.
Women invest with purpose and values
For many, financial success isn’t only measured by returns, but by impact. As more women take an active role in their finances, more are making sustainable investing decisions. This is true for 52% of women, compared with 44% of men. Because it turns out, money really does talk. It’s no wonder we’re witnessing a booming ESG investment trend. By 2025, global sustainable fund assets reached approximately $3.2 trillion - nearly double from 2020 levels.
This values-driven approach doesn’t just feel good. It challenges the widely-held assumption that sustainable investments means compromising returns. In fact, some studies show the opposite to be true. Sustainable funds outperformed their traditional peers in 2023 with a median return of 12.6% compared to 8.6%.
Increasingly, women are choosing pensions or ISAs that exclude fossil fuels. Or, those that invest in gender-diverse companies. Because for them, it’s about more than just pounds and pence. They want their money to reflect their values and investing becomes a tool for both financial growth and positive change.
Women favour a long-term approach
When it comes to investing, women are prone to taking a steadier, more thoughtful approach - and it’s working. A study by Warwick Business School revealed women traded only nine times a year vs.13 for men. And their portfolios outperformed their counterparts by approximately 1.8 % annually.
While both women and men tend to stick to their investment plan during turbulent times, men are more prone to act. For example, by increasing or selling their investments altogether. Whereas women don’t make impulsive knee-jerk reactions when volatility hits.
It therefore becomes clear that women aren’t risk averse, they’re risk aware. Women prefer a long-term approach and invest in companies with steadier long-term performance. They’re more likely to ask questions, vet what they’re buying, and stay invested through ups and downs - which could result in better outcomes.
A strength that shouldn’t be ignored
Women’s investing habits reflect real-life priorities like longer lives, smaller pensions, and care responsibilities. But this is paired with a strong focus on values. These aren’t limitations, but rather a strategic edge. As women take greater financial control in the UK and beyond, perhaps they might be shaping the future of investing. Whether through ISAs, pensions, or ethical funds, the message is clear. You can invest on your own terms - with purpose, patience, and impact.
Learn more about the way women invest in episode 21 of The Pension Confident Podcast. Listen to the episode, watch on YouTube or read the transcript.
Maria Collinge is a Freelance Editor and Writer who previously worked as Global Editor at Female Invest. Her writing focuses on gender equality in finance. She’s also written for a variety of other publications including Harper’s Bazaar, The Telegraph, iNews, Metro, Glamour and more.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
